What does customer satisfaction mean?
Satisfied customers are the goal of every company and a prerequisite for successful business development. Because without customers, there is no turnover. But what exactly is meant by customer satisfaction?
Customer satisfaction is particularly about a customer evaluating purchased products or services after the purchase based on their experience of using them.
Customer satisfaction therefore exists when there is a match between the customer’s expectations and the experience of using the product or service.
If expectations are not met, the customer is dissatisfied. This dissatisfaction can ultimately lead to the loss of the customer.
Customer satisfaction is therefore a decisive factor for the long-term success of a company.
It is about understanding the needs and expectations of customers and offering them a positive experience.
A satisfied customer is more likely to buy from a company again, recommend it to others and remain loyal in the long term.
In order to increase customer satisfaction, companies must continuously improve their products or services and respond to their customers’ needs.
This requires effective communication, excellent customer service and quick problem solving when difficulties arise.
Ultimately, customer satisfaction is not only a measure of a company’s success, but also an indicator of the quality of its products or services.
Companies that make their customers happy have a competitive advantage and can be successful in the long term.
Customer satisfaction should therefore play a central role in the corporate strategy.
Why is customer satisfaction important for companies?
Aiming for a high level of customer satisfaction makes sense for companies for various reasons.
One of the main arguments is that a satisfied customer becomes a repeat customer and, at best, a regular customer. This creates a strong bond between the customer and the company.
On the other hand, satisfied customers also recommend certain products or the company to friends and acquaintances, so that you expand your customer base. And in this case, more customers mean more sales for your company.
A satisfied customer is also generally willing to pay a higher price for the product. Price policy adjustments are therefore more likely to be accepted and in turn lead to an increase in your turnover.
In addition, the satisfaction of your customers and positive word-of-mouth advertising will ensure that you stand out from your competitors and position yourself well on the market.
Conversely, if your customers are dissatisfied, there is a risk that you will lose customers to the competition if the competitor’s product meets the customer’s expectations better.
If customers are dissatisfied, negative word-of-mouth or negative reviews are also a possible reaction that can be detrimental to your company.
Measuring customer satisfaction is therefore important in order to determine the current state of your customers’ satisfaction.
Because only if you know that your customers are not satisfied with your product or service do you have the opportunity to make changes.
Negative feedback can therefore help to improve your products in the long term and promote positive company development.
What are the benefits of high customer satisfaction?
In the previous chapter, I have already explained some of the benefits of high customer satisfaction. In this section, we will discuss these benefits in more detail and also look at other benefits.
1. Customer loyalty
A high level of customer satisfaction is closely linked to customer loyalty.
If customers are satisfied with a company’s products or services, they are more likely to work with that company in the long term and buy products or services repeatedly.
Their satisfaction strengthens their trust in the company and reduces their willingness to switch.
However, it should be noted that customer satisfaction alone is not enough to build strong customer loyalty.
Companies must continuously work on improving their products, services and customer service in order to maintain customer satisfaction.
Consistently meeting customers’ expectations and needs is crucial for long-term loyalty.
Only by continuously evolving and adapting to changing customer needs can companies build strong customer loyalty and maintain long-term relationships with their customers.
2. Positive word of mouth
The next benefit of high customer satisfaction is positive word of mouth.
This means that satisfied customers tend to share their experiences with the company, its products and services with others and recommend them to others.
They tell their friends, family members and colleagues or share their experiences on review platforms.
Word of mouth is an extremely effective and inexpensive form of advertising that can attract new customers. Recommendations from satisfied customers are often seen as more credible than advertising or marketing messages from the company itself.
Potential customers are more likely to trust the opinions of people who have already had positive experiences. Sharing positive experiences in this way can increase the company’s reach and strengthen the trust of potential customers.
3. Image and brand building
A high level of customer satisfaction also plays a decisive role in image and brand building.
When customers are satisfied with a company, a positive image of the brand is created. They associate the company with quality, reliability and excellent customer service.
This leads to a positive image that attracts potential customers and strengthens trust in the brand.
Particularly in highly competitive industries, a high level of customer satisfaction can help a brand to stand out from its competitors. Customers are more likely to prefer a brand that is known for its excellent customer service and first-class quality.
4. Competitive advantage
If customers are extremely satisfied with a company’s products or services, this becomes a valuable unique selling point.
The company stands out from its competitors and is seen as the preferred choice. This strong market position not only strengthens the company’s image, but also leads to long-term success.
By making customer satisfaction a top priority and consistently providing excellent customer service, a company can build a positive perception in the industry.
Customers will perceive the company as trustworthy, reliable and of high quality. As a result, they will be more willing to fulfill their needs with that company and purchase their products or services.
Strengthening the market position through high customer satisfaction has far-reaching effects on the long-term success of a company. It allows the company to stand out from the competition and build a loyal customer base.
Customers are more likely to buy from that company repeatedly and recommend it to others, leading to positive word of mouth and attracting potential new customers.
In addition, a strong market position due to high customer satisfaction can also mean that the company can charge higher prices for its products or services.
Customers are willing to pay a higher price if they are convinced of the quality and customer service. This contributes to an increase in sales and profitability.
5. Increase in sales
Satisfied customers are not only loyal, they also develop a strong trust in the brand. They are convinced by their previous experiences with the company and therefore have a strong tendency to buy products or services repeatedly.
These repeat purchases lead to increased demand and therefore to a significant increase in sales.
In addition, satisfied customers are also particularly open to cross-selling and up-selling offers. If they are satisfied with a product or service, they are more likely to purchase additional products or services from the same company. This can significantly increase the average order value and therefore have a positive impact on sales.
The combination of repeat purchases and the willingness to accept additional offers enables companies to significantly increase their sales figures.
By consistently providing excellent customer service and meeting the needs of their customers, companies can build strong customer loyalty and establish long-term business relationships.
This in turn has a positive effect on turnover and contributes to the sustainable development of the company.
6. Feedback and improvement
Customer satisfaction measurements are a valuable source of feedback from which companies can benefit.
By collecting targeted information about their customers’ satisfaction, companies are able to identify weaknesses and, based on this, initiate improvement measures to raise the customer experience to an optimal level.
What constitutes high customer satisfaction?
Now that we know what the benefits of high customer satisfaction are, in this chapter we will look at the aspects that make for high customer satisfaction.
There are several. So let’s start with the first one.
1. Fulfillment of customer needs
The first aspect that constitutes high customer satisfaction is the fulfillment of customer needs; if a company meets the needs of its customers, they are generally more satisfied with the products or services offered.
Customer satisfaction occurs when the expectations and requirements of customers are met or even exceeded.
If a company knows exactly what its customers’ needs are and responds to them, it can develop products and services that optimally fulfill these needs.
This increases the likelihood that customers will be satisfied with the company.
2. Effective communication
The second characteristic is effective communication.
Good communication with customers is crucial for their satisfaction. This includes clear and understandable information about the products or services, quick response times to inquiries or complaints, and open and transparent communication.
Effective communication between a company and its customers is crucial to understanding their needs, clarifying expectations and solving problems.
Through clear and open communication, a company can ensure that customers are well informed and that their questions or concerns are answered appropriately.
When customers feel that their concerns are taken seriously and they are kept informed about the progress of their inquiries or orders, their satisfaction increases.
Effective communication also allows a company to clearly communicate its products or services and give customers realistic expectations. When customers know exactly what to expect from a product or service, they are more likely to be satisfied when those expectations are met.
In addition, effective communication can help to avoid misunderstandings and address conflicts at an early stage.
When a company communicates proactively and addresses emerging issues quickly, customers can have confidence that their concerns will be taken seriously and solutions will be found.
Effective communication also plays an important role in responding to customer feedback. By actively responding to feedback and making improvements, a company shows customers that their opinions are valued and that the company is committed to meeting their needs.
Overall, effective communication helps customers feel heard and understood. Through clear and open communication, companies can gain the trust of customers, avoid misunderstandings and solve problems effectively.
3. Excellent customer service
Excellent customer service is another aspect of high customer satisfaction and means that customers are supported quickly and effectively when they have questions, problems or concerns. When customers feel that their concerns are taken seriously and that they receive a quick solution, their satisfaction increases.
Outstanding customer service helps customers feel valued and have a positive experience with the company. Friendly and knowledgeable customer service allows customers to build trust and feel that the company cares about their well-being.
Good customer service can also help solve problems and fulfill customer needs. When a company is able to respond to the individual needs of its customers and offer appropriate solutions, the likelihood of high customer satisfaction increases.
In addition, outstanding customer service can also help to build customer loyalty. When customers have a positive experience with a company’s customer service, they are more likely to make repeat purchases from that company and recommend it to others.
A high standard of customer service can also serve as a unique selling point for a company. If a company offers better customer service than its competitors, this can lead to customers remaining loyal and choosing the company.
Overall, outstanding customer service is of great importance for customer satisfaction. By providing fast and effective support, responding to individual needs and creating a positive customer experience, a company can achieve a high level of customer satisfaction.
Excellent customer service helps to build trust, promote customer loyalty and set the company apart from the competition.
4. Trust and credibility
Customers trust companies that keep their promises and have a high level of credibility. They have the feeling that the company takes their needs seriously and offers them high-quality products or services.
Trust is another important factor for customers when it comes to making purchasing decisions.
When customers trust a company, they are more likely to make repeat purchases from that company and make positive recommendations. They have confidence that the company will deliver on its promises and provide them with a good experience.
Credibility also plays a major role in customer satisfaction. A credible company is transparent and honest in its business practices. It keeps its promises and communicates openly with customers.
Customers appreciate it when a company is credible and consider it a reliable source.
To build trust and credibility, it is important to meet or even exceed customer expectations.
A company should keep its promises, offer high-quality products or services and respond to customer feedback.
By communicating openly and building a long-term relationship with customers, trust can be strengthened and the company’s credibility increased.
By building trust and credibility, companies can build long-term customer relationships and generate positive referrals.
5. Personalization and individualization
An individual approach and personalized offers show your customers that you value them and understand their needs. By providing customized solutions, you can increase customer satisfaction.
Personalization refers to adapting a product or service to the specific requirements of a customer. This can mean adding or changing certain functions or features to meet the customer’s needs.
A personalized product or service shows the customer that the company takes their individual wishes seriously and strives to satisfy them.
Individualization goes one step further and allows the customer to actively participate in the design of the product or service. The customer can choose from various options and customize the product or service according to their own ideas.
This creates a feeling of uniqueness and exclusivity for the customer.
Through personalization and individualization, you can build a close bond with your customers.
6. After-sales service
Effective after-sales service plays a crucial role in increasing customer satisfaction. It refers to the support and care that a company provides to its customers after they have purchased a product or service.
When customers encounter problems or questions after purchase, they expect a quick and effective solution.
Good after-sales service ensures that customers receive support when difficulties arise and that their concerns are taken seriously. This helps to ensure that customers remain satisfied and have confidence in the company.
In addition, after-sales service provides the opportunity to create a positive customer service experience.
Friendly and knowledgeable staff who are willing to answer customer questions and solve problems help customers feel valued and satisfied with the company.
Good after-sales service can also help to ensure that customers buy from you again and recommend your company to others.
If customers know that they will be well looked after after their purchase, they are more likely to use your products or services again or recommend your company to others.
It is important to note that poor after-sales service can have a negative impact on a company’s image.
Customers share their experiences with other potential customers and negative reviews can spread quickly.
A good after-sales service, on the other hand, strengthens the company’s image and shows that it cares about its customers’ satisfaction.
Overall, good after-sales service helps to ensure that customers are satisfied and build a positive relationship with the company. This can lead to increased customer loyalty and increased sales in the long term.
7. Continuous improvement
The last aspect is continuous improvement, because a high level of customer satisfaction is closely linked to it.
In order to achieve a high level of customer satisfaction, it is necessary to work continuously on improving products, services and processes.
Customer satisfaction is not a static state, but an ongoing process.
By collecting and analyzing customer feedback, weaknesses can be identified and targeted measures can be taken to rectify them.
Continuous improvements can optimize the customer experience and increase satisfaction.
A culture of continuous improvement also enables companies to respond proactively to changing customer needs and market trends.
By being open to feedback and willing to make changes, companies ensure that their business always stays up-to-date and meets the expectations of their customers.
Continuous improvement should therefore take place in all areas of the company – from product development to customer service and internal organization.
Through continuous improvement, long-term customer relationships can be built and competitiveness strengthened.
What influences customer satisfaction?
Customer satisfaction is not only influenced by the product, but also by many other factors along the customer journey.
It should be clear what you offer as soon as you enter the store. If the product range is presented in an appealing way and is broad enough, this is a plus point for your customer.
The same applies to online shopping.
A user-friendly website with good filter options that allow the customer to quickly find the desired product also contributes to customer satisfaction.
Online shopping is also influenced by other factors such as the payment method or delivery and returns processing.
If, for example, payment on account is not possible or shipping takes longer than expected, this has a negative impact on customer satisfaction. If, on the other hand, various payment systems are offered and shipping is smooth and fast, these are plus points.
Another aspect that plays a major role both online and offline is service and customer support.
Eternally long queues or unfriendly staff are more likely to deter customers from shopping with you again.
However, if the customer is looked after personally and given good advice or is helped quickly and easily with questions, you can certainly hope that the customer will make another purchase.
Why is it important to measure customer satisfaction?
Microsoft, Amazon, Apple, Alphabet/Google and Facebook are the most valuable and successful companies in the world for several reasons.
One of the main reasons is their focus on customer satisfaction. These companies put the customer at the center of everything they do to satisfy their customers. They understand that customer satisfaction is a key indicator of their success.
These companies are extremely conservative when it comes to customer satisfaction because they understand that without satisfied customers, sales cannot be generated and without sales, long-term survival in the market is not possible. They know that customer satisfaction leads to customer loyalty.
Satisfied customers are more likely to remain loyal to the company and make repeat purchases.
Measuring customer satisfaction also offers these companies the opportunity to identify areas for improvement. By collecting feedback, they can identify weaknesses in their products, services or processes.
This enables them to identify and implement opportunities for improvement in order to continuously optimize the customer experience.
By focusing on customer satisfaction and continuously striving to improve their products and services, these companies have achieved a strong market position.
They have gained the trust of their customers and established themselves as leading brands.
Based on customer satisfaction, they have also been able to develop the strategic direction of their company and thus be successful.
Overall, it is clear that customer satisfaction is a decisive factor in the success of these companies. They have recognized that satisfied customers are the key to long-term growth and a strong market position.
That’s why you should always measure the mood of your customers and focus your company on customer satisfaction.
How can customer satisfaction be measured?
1. Surveys
The easiest and best way to measure customer satisfaction is undoubtedly to use surveys.
Through a questionnaire customized to your company, you have the opportunity to ask specific questions related to your products, website, customer support or other important areas.
The opinions, needs and experiences of your customers provide you with valuable information that can help you to further develop your company and meet the needs of your customers.
There are various tried and tested methods for conducting customer satisfaction surveys. Here are some approaches that have proven successful:
Post-purchase surveys
These surveys are sent after the purchase or use of a product or service. They may include questions about satisfaction with the product, customer service, delivery, etc.
Periodic surveys
Companies can send regular surveys to their customers in order to receive continuous feedback. This can be done monthly, quarterly or annually, for example.
Transactional Surveys
These surveys are conducted immediately after a specific interaction with the company, e.g. after a call to customer service or after a visit to the store.
They allow companies to get specific feedback and address issues immediately.
Net Promoter Score (NPS)
The NPS is a widely used method of measuring customer satisfaction. Customers are asked to indicate on a scale of 0 to 10 how likely it is that they would recommend the company to others.
Based on the answers, customers are divided into promoters (9-10), passives (7-8) and detractors (0-6).
Customer Effort Score
The Customer Effort Score (CES) is a key figure that is determined using a special type of question in a customer satisfaction survey.
It provides insights into how straightforward an interaction with your company or product was from the customer’s perspective. For example, it provides information on how easy it was for them to find the right contact person or get answers to their questions.
Based on this information, targeted measures can be taken to reduce complexity and improve the user experience.
By optimizing processes and simplifying procedures, you can ensure that your customers have a smooth and stress-free experience.
Customer Satisfaction Score
The Customer Satisfaction Score (CSAT) gives you an easy way to regularly survey customer satisfaction in a specific area of your business or with your products and services.
For example, you can survey your customers’ satisfaction with your ordering process, your website, complaint handling, support and much more.
The CSAT method is another important indicator that helps you to better understand the customer and their satisfaction along the entire customer journey.
It uses just one question, similar to the NPS or CES survey, where your customers can give their feedback on a scale.
By using the CSAT regularly, you gain valuable insights into your customers’ satisfaction and can take targeted measures to improve their experience.
This enables you to continuously develop your company and meet the needs of your customers.
2. Analysis of customer reviews and comments
Analyzing customer reviews and comments is an effective way to measure customer satisfaction.
By analyzing this information, companies can gain valuable insights into the opinions and experiences of their customers.
There are several ways to analyze customer reviews and comments.
One way is to use automated text analysis techniques to identify key words and phrases that indicate positive or negative reviews.
These techniques can also be used to identify themes or trends in customer comments.
Another method is the use of sentiment analysis tools, which can be used to identify the emotional tone of customer reviews.
This allows companies to understand not only whether customers are satisfied or dissatisfied, but also the specific reasons for their feelings.
In addition, companies can also carry out manual analyses by taking a close look at customer reviews and comments. In doing so, they can recognize patterns, identify recurring problems and derive opportunities for improvement.
Measuring customer satisfaction by analyzing customer reviews and comments offers companies the opportunity to identify weaknesses in their products or services and initiate targeted measures for improvement.
It also enables them to emphasize positive aspects and build on their strengths.
However, it is important to note that analyzing customer reviews and comments is only one part of the overall assessment of customer satisfaction.
It should be used in conjunction with other measurement methods such as surveys, feedback loops and direct customer contact to get a comprehensive picture of customer satisfaction.
3. Mystery shopping
Mystery shopping is another method of measuring customer satisfaction. Specially trained people, so-called mystery shoppers, are used to evaluate the service and experience from a customer’s perspective.
The mystery shoppers pretend to be normal customers and carry out certain interactions with the company, such as purchasing a product or requesting information. They then evaluate various aspects of the customer experience, such as the friendliness and competence of the staff, the cleanliness of the store or the efficiency of the ordering process.
The advantages of mystery shopping are that it enables an objective evaluation from a customer’s perspective. It offers companies an insight into the actual customer experience and helps to identify weaknesses in service or processes.
In addition, mystery shopping can also help to raise awareness of the importance of customer satisfaction within the company. If employees know that they are regularly assessed by mystery shoppers, they may be more motivated to provide a better service.
However, it is important to note that mystery shopping alone is not enough to get a complete picture of customer satisfaction.
It should be used in conjunction with other measurement methods such as surveys or analyzing customer reviews to gain a comprehensive understanding of customer satisfaction.
In summary, mystery shopping is an effective way to measure customer satisfaction as it provides an objective assessment from a customer’s perspective and helps companies to identify areas for improvement.
Again, however, it should be used as part of a comprehensive approach to measuring customer satisfaction.
What key figures are there for measuring customer satisfaction?
There are various metrics that you can use to measure customer satisfaction. We have already written about this in detail in our comprehensive article. You can read it here.
I have compiled an excerpt of possible key figures for you below:
Net Promoter Score (NPS)
The NPS is a key figure that is intended to provide an indication of customer loyalty. Customers are asked to use a scale to classify whether they would recommend the company or product to others.
A distinction is made here between promoters, who would recommend the product to others, and detractors, who would not.
Customer Satisfaction Score (CSAT)
The Customer Satisfaction Score is a key figure that measures current customer satisfaction.
Customers are asked to rate their satisfaction with a product on a scale of 1 to 7, for example.
The average is then calculated from all the results.
Customer Effort Score (CES)
The Customer Effort Score is used to determine how much effort a customer needs to clarify a matter with the company. It is therefore also referred to as the customer effort index.
In addition to the aforementioned key figures, you also have the opportunity to obtain further important information from a customer survey.
Negative feedback in particular gives you a good overview of what you can improve.
With easyfeedback, you can easily create a customer satisfaction survey yourself using the NPS method or you can use our sample template to measure customer satisfaction.
How can you increase customer satisfaction?
There are many different ways to increase customer satisfaction. We have also written a comprehensive article on this.
You can find it here.
I have summarized a few helpful tips from the article below:
You can only increase customer satisfaction if you know what your customers want. Therefore, regularly get feedback from your customers and find out what they want. This will give you a good indication of how you can increase customer satisfaction.
Focus on your product first. If your product does not satisfy the customer, it will be difficult to achieve a high level of customer satisfaction, no matter how good the service is.
Check the quality of your product. Is it already convincing or can you make some adjustments? Are there ways to even exceed your customers’ expectations?
Present your products honestly and transparently in your advertising so that the customer knows what they are buying. A product that is specially advertised in a TV commercial and then fails to meet the customer’s self-created high expectations is not very effective.
Online shopping is all about speed: everything is just a click away. Make it as easy as possible for your customers to find and buy your products. If the customer has to search for a long time, they will probably quickly turn to a competitor.
However, quick responses to customer inquiries and good availability of your company also contribute to high customer satisfaction. Focus on reducing your waiting times as much as possible.
Your customers will remember good service. For example, surprise your customers with a free gift or compensation if things don’t go smoothly.
This will strengthen your customers’ loyalty to your company and contribute to the long-term success of your business.
Conclusion: Customer satisfaction – a key indicator for the success of your company
As described in the title of this summary, customer satisfaction is a key indicator of a company’s success.
Why?
Satisfied customers are loyal, recommend the company to others and therefore make a significant contribution to sales growth. It is therefore of great importance to understand the needs and expectations of customers and to continuously fulfill them.
In order to increase customer satisfaction, companies should pursue a customer-oriented strategy. This includes a high quality of service, fast response times to inquiries and complaints and individual customer care.
Through regular surveys and feedback mechanisms, companies can also obtain valuable information about their customers’ satisfaction and take targeted improvement measures.
A high level of customer satisfaction not only has a positive impact on sales, but also on the company’s image.
Satisfied customers speak positively about their experiences and thus contribute to the company’s positive reputation. This in turn can attract new customers and support the company’s growth.
Companies should therefore work continuously to increase customer satisfaction and offer them a positive customer experience. This is the only way they can build long-term customer relationships and hold their own in a competitive environment.
More about Customer Satisfaction
- 8 methods for analyzing customer satisfaction
- How to prioritize customer satisfaction measures
- 8 (atypical) measures to improve customer satisfaction
- Proving customer satisfaction with key performance indicators
- 8 reasons why increasing customer satisfaction doesn’t work!
- How you can measure the level of customer satisfaction
- Customer Satisfaction and Customer Loyalty: correlation and differences
- Example structure of a customer satisfaction survey: structure for valuable insights
- Customer Satisfaction and Customer Retention: success factors for sustainable growth
